TigerRisk Partners 2021 | January 2020 Catastrophe Snapshot It still must be said: 2020 was a record-breaking year any the charts with the country’s largest recorded wildfire burning way you cut it. an area the size of Rhode Island in Northern California. The Hurricane strength derecho that tore through the Midwest The entire world has been dealing with the fallout from CO- in August was the largest loss caused by a single event since VID-19, the most expansive and deadly pandemic since the 1980. Unbeknownst to many, Puerto Rico, Utah and North Ca- 1918 Spanish Flu. After George Floyd’s death in March, riots rolina all felt their most intense earthquakes since 1918, 1992 broke out across 20 states from May to June becoming the and 1926 respectively. The year closed out with the relatively costliest riots in U.S. history. The North Atlantic hurricane small Nashville bombing, making 2020 a year in which every season started two weeks early and became the most active peril was experienced. Among all these records, the year was season on record. The Western United States had one of its marked by an extremely large number of low severity events worse wildfire seasons with a handful of states setting new leading to large retained losses for insurers. records for the largest fires in their history. California topped Caption: based on PCS losses and cat codes trended to 2020 COVID19 By March, the novel Coronavirus pandemic captured the at- of at least 90%. Distribution for some vaccines began near the tention of the entire world, resulting in periods of stay-at-ho- end of 2020 and hundreds of millions of people are expected me orders, mask mandates, and a new way of living across to be vaccinated in the first half of 2021. In addition to the the globe. As expected, a second wave arose in the fall from a direct costs of sickness and death, attempts to slow and redu- surge of cases across the United States and Europe. In the Uni- ce the spread of the disease led to the cancellation of nearly ted States there were over 12 million confirmed cases in the all large gatherings, temporary closures of many businesses, fourth quarter, and roughly 20 million during the year leading and other economic losses. Lloyd’s of London predicts global to 350 thousand deaths. While data collection has been in- insured losses relating to COVID-19 will exceed $107B. consistent, 2020 experienced at least 80 million cases and 1.8 million deaths around the globe. A glimmer of hope arrived in November, with the announcements of successful vaccine tri- als by Moderna, Pfizer, and AstraZeneca, all with efficacy rates 2 2020 Catastrophe Snapshot RIOTS As detailed in our Mid-Year Review, social and political unrest led to rioting across the United States resulting in industry los- ses estimated over $2B from property damage and business interruption. In some ways this value is surprisingly small given the widespread destruction. It only modestly exceeds the $1.4B of inflation adjusted losses from the 1992 Rodney King riots. Furthermore, compared to the record-breaking count of natural catastrophes that occurred this year, the impacts of these riots on the market were minimal overall. SEVERE STORM An above average US severe storm season caused nearly $30B 140 mph. Damages estimated to be at around $7.5B by NOAA in insured losses with significant loss coming from large scale included significant crop damages making it the costliest sing- events (loss of $1b or more). Derechos, geographically large le severe storm event since 1980. This derecho had the second storms associated with straight line wind damage, played a highest cat loss of the year, with Hurricane Laura being the key role in 2020. In April and May, two derechos occurred in only event to surpass it, yet it was largely underreported due the Southern United States within the same week. Similarly, to the sheer number of events that took hold of the news cy- three more derechos occurred in the Midwest and Northern cle this year. Despite the Nashville tornado in March, tornado United States in one week in June. The June 3rd derecho span- frequency was lower than average. This contrasts with 2019, ned from Pennsylvania to New Jersey resulting in significant which saw losses driven largely by above average tornado ac- damage across cities including Philadelphia, with wind gusts tivity. over 90 mph. An August 10th derecho hit the Midwest hard with catastrophic straight-line winds reaching speeds of up to Caption: Estimated peak gusts from the Midwest HURRICANE Keeping the industry and news cycle busy was the hyperactive Hurricane season of 2020, which produced a record of 30 named storms. This exceeds the prior record in 2005 of 28, and it is the first year to date that the Greek letters Eta, Theta, and Iota were used. The season had an early start in May for the 6th year in a row, with Tropical Storm Arthur, and continued with high frequency up until mid-November. There were 13 hurricanes, just below the record set in 2005. Of those storms, 6 became major hurricanes, twice the atlantic hurricane season average. Of the 12 US named storm landfalls, Louisiana was hit five times, a record number of landfalls for the state in one season, with Hurricanes Laura and Delta striking Louisiana just 13 miles and six weeks apart. Major Hurricane Laura was the costliest event of the year, with industry losses estimated between $8B and 2020 saw under $20B in Hurricane losses, while the lower fre- quency year 2017 saw above $70B overall, with Hurricane Irma surpassing 2020 in just a single event $14B in total. Hitting Southwest Louisiana with sustained winds of 150 MPH, the storm led a destructive path through the state impacting areas of Texas, Arkansas and Mississippi. Regardless of records broken for sheer frequency of storms, the year was not particularly remarkable when it came to losses overall, with notable and recent past years like 2017 still eclipsing 2020 in total hurricane losses. 2020 saw under $20B in Hurricane losses, while the lower frequency year 2017 saw above $70B overall, with Hurricane Irma surpassing 2020 in just a single event. 2005, a comparable year in frequency to 2020, saw almost $60B in losses, further illustrating that for hurricanes, this was a season of high frequency, but low severity. Caption: Maximum wind speed observed from 2020 Tropical Cyclones derived from Verisk Respond 4 2020 Catastrophe Snapshot WILDFIRE Wildfire conditions were ideal in 2020 leading to large and US wildfire on record, burning over 1,000,000 acres. fast-moving fires across the Western United States. The sum- In addition to the wind, scientists suggest that climate change mer winds were extremely unusual in terms of timing, extent is accelerating the rate of vegetation drying through increases and strength. Typically, these winds happen in early Septem- in both temperature and the vapor pressure deficit which is ber but cold air in the interior of the Western states and the a measure of atmospheric dryness. Studies have shown that record heat on the West Coast set up the atmospheric conditi- the Creek Fire, that burned 100,000 acres in one day in the ons that drove strong coastal winds over a large area. Strong Sierra Forest, was fueled by trees that died during the 2011- winds paired with dry thunderstorms – a natural phenomenon 2017 drought that was exacerbated by human-caused climate where the atmosphere produces thunder and lightning, but change – an issue that is likely to persist for some time and most or all of the precipitation evaporates before reaching the has been highlighted by land managers. Colorado also set se- ground – ignited simultaneous fires throughout an already dry veral records with three of the state’s largest fires occurring west coast. Multiple fires in Oregon, California and Washing- this year. The late October East Troublesome Fire exploded ton covered more than 20 miles in 24-hours and in some cases overnight burning at a rate of 6,000 acres per hour allowing burned more than 100,000 acres in one day. In Oregon, more it to cross the continental divide by climbing the highest point than 900,000 acres burned in just 72 hours, almost double the in the continental USA and continuing down the opposite side. state’s 10-year annual burn area average of 500,000 acres. Ca- Though the frequency and severity with respect to area bur- lifornia, Colorado and Arizona all recorded their largest ever ned is up this year, insured losses are much lower than they fires. In California, more acreage burned this year than in the were in 2017 and 2018, with ongoing loss development. last 3 years combined. The state saw five of the six largest fires with the August Complex Fire taking the top spot as the largest In California, more acreage burned this year than in the last 3 years combined. The state saw five of the six largest fires with the August Complex Fire taking the top spot as the largest US wildfire on record, burning over 1,000,000 acres. 5 2020 Catastrophe Snapshot GLOBAL Outside the United States, plenty of catastrophic events occur- when super typhoon Goni rapidly intensified over warmer red. On August 4th 2,750 tons of improperly stored ammo- than average seas bringing it from a tropical depression to a nium nitrate exploded in a port in Beirut Lebanon resulting 175 mph super typhoon in 54 hours. Goni made landfall at a in 200 deaths, more than 12,000 reports of bodily injuries strength equivalent to a category 4 hurricane in the Philippi- and damaged buildings within the 10 km blast radius that is nes causing flooding, mudslides and strong winds.